Dainty Company sold accounts receivable without recourse with face amount of P6,000,000. The factor charged 15%...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Dainty Company sold accounts receivable without recourse with face amount of P6,000,000. The factor charged 15% commission on all accounts receivable factored and withheld 10% of the accounts factored as protection against customer returns and other adjustments. The entity had previously established an allowance for doubtful accounts of P200,000 for these accounts. By year-end, the entity had collected the factor's holdback there being no customer returns and other adjustments. Required: Prepare journal entries to record the factoring and the subsequent collection of the factor's holdback. Dainty Company sold accounts receivable without recourse with face amount of P6,000,000. The factor charged 15% commission on all accounts receivable factored and withheld 10% of the accounts factored as protection against customer returns and other adjustments. The entity had previously established an allowance for doubtful accounts of P200,000 for these accounts. By year-end, the entity had collected the factor's holdback there being no customer returns and other adjustments. Required: Prepare journal entries to record the factoring and the subsequent collection of the factor's holdback.
Expert Answer:
Answer rating: 100% (QA)
General Guidance The answer provided below has been developed in a clear step by ste... View the full answer
Related Book For
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon
Posted Date:
Students also viewed these general management questions
-
Prepare journal entries to record these transactions: Mar. 21 Accepted a $6,200, six-month, 4% note dated today from Bradley Brooks in granting a time extension on his past-due account. Sept. 21...
-
Prepare journal entries to record the following selected transactions of Paloma Company. Mar. 21 Accepted a $3,100, 180-day, 10% note dated March 21 from Salma Hernandez in granting a time extension...
-
Prepare journal entries to record these transactions: (a) Benton Company retires its delivery equipment, which cost $41,000. Accumulated depreciation is also $41,000 on this delivery equipment. No...
-
1. Was the contract between Joel King and Barber bilateral or unilateral? 2. What was bargained for and given in exchange by each party? Mark P. Painter, Judge This case involves neighbors and the...
-
Refer to problem 55. Yohanse uses the warehouse for 4 years and sells it. During this period, he properly deducts a total of $25,000 in depreciation. What is Yohanses gain or loss on the warehouse if...
-
Sanders Fashion enters into a lease arrangement with Highpoint Leasing for 5 years. Sanders agrees to pay 4% of its net sales as a variable lease payment. Sanders does not pay any fixed payments....
-
A FedEx airplane costs $50 million and is expected to fly 500 million miles during its 10-year life. Residual value is expected to be zero because the plane was used when acquired. If the plane...
-
Flanagan Company reports the following for the month of June. Instructions(a) Compute the cost of the ending inventory and the cost of goods sold under (1) FIFO and (2) LIFO.(b) Which costing method...
-
As a Department or Operations Manager, how would you go about deciding on or establishing the best criteria to select employees for each area that you manage?
-
What is a companies TIE Ratio if there net income is $7175 there interest expense is ($1128) and there income tax expense is 1894?
-
The company had the following cash transactions Paid employees $25,000 Paid for equipment 30,000 Collected from customers 45,000 Paid for advertising 5.000 Borrowed from the bank 50,000 What is the...
-
Compared to Cinnamons operating margin in 2009, if it is deemed to have control of Cambridge, its operating margin in 2010 will most likely be: A. lower. B. higher. C. the same. Cinnamon, Inc. is a...
-
Based on Martinezs conclusions, Stellars financial statements are best categorized as: A. non-GAAP compliant. B. GAAP compliant, but with earnings management. C. GAAP compliant and decision useful,...
-
If the euro is chosen as the Ukraine subsidiarys functional currency, Eurexim will translate its accounts receivable using the: A. rate in effect at the transaction date. B. average rate for the...
-
In 2009, Cinnamons earnings before taxes includes a contribution (in millions) from its investment in Cambridge Processing that is closest to: A. 3.8. B. 5.8. C. 7.6. Cinnamon, Inc. is a diversified...
-
Compared to 2009 net income as reported, if XYZ had used the same expected volatility assumption for its 2009 option grants that it had used in 2008, its 2009 net income would have been: A. lower. B....
-
The specific business problem is new frontline managers in healthcare organizations have leadership skill deficits, which has resulted in low morale and increased turnover of their team members. Gap:...
-
1. Advertising for eyeglasses _________ (increases/decreases) the price of eyeglasses because advertising promotes _________. 2. An advertisement that succeeds in getting consumers to try the product...
-
Hoyle Company owns a manufacturing plant with a fair value of $4,600,000, a recorded cost of $8,500,000, and accumulated depreciation of $3,650,000. Patterson Company owns a warehouse with a fair...
-
The Williamsport Crosscutters baseball team had a player contract with Clemens (a promising young catcher) that was recorded in its accounting records at $500,000. The Reading Phillies hada player...
-
The following article raises questions about Cardinal Healths accounting for an expected legal settlement. Management responded to the accusations by sending a letter to all shareholders and to...
-
What are the properties of instantaneous centre?
-
A chain with three links is shown in Fig.1.7. Prove that the chain is locked. 2 3 1 Fig.1.7 Three-bar chain
-
Differentiate between a mechanism and a machine.
Study smarter with the SolutionInn App